What is Enigma (ENG)?

The features that make blockchain appealing — for example, its secure and distributed nature — can in some ways be a drawback when trying to expand its application to new services. The original blockchain, Bitcoin, was intended for storing records of monetary transactions, each of which is a very tiny amount of data, consisting of not much more than the comings and goings of a list of numerical amounts.

Yet even though each individual transaction is an almost insignificant amount of data, the sheer volume of transactions has been enough to raise contentious debates of how, or even if, the technology can scale.

While it would be beneficial to start storing other kinds of data on blockchains and let other industries reap the benefits of security and decentralization, almost any other kind of commonly used data would be huge compared to simple currency transactions, making scaling issues all the more challenging.

It has taken the Bitcoin blockchain around 9 years to reach roughly 170 gigabytes in size. Storing images and documents could easily reach that in a fraction of the time, and storing videos could eat up that kind of space almost immediately.

Enigma proposes to solve that problem by not trying to store everything on the blockchain. While many blockchain idealists aspire to make everything 100% decentralized and as much on the blockchain as possible, a system like Enigma’s prioritizes practicality over idealism.

Enigma provides a blockchain-agnostic system where any blockchain can store data off-chain, while still maintaining key components of privacy and security. They offer what they call “secret contracts,” which are smart contracts that have key inputs and outputs obfuscated so that only the relevant parties can make sense of the data.

With this technology, Enigma aspires to be the solution for any blockchain that has data needs that might otherwise be an obstacle to growth.

What Does Enigma Do?

Essentially, Enigma creates a way for people to store certain critical data on a blockchain, while having secondary data stored offchain in a way that can be safely related to the onchain data.

For example, if some organization was storing videos, key data points like the name of the person who recorded or owned the video and the title would be kept onchain, but more voluminous data, such as the video itself, would be kept offchain. Through Enigma’s secret contract system, only the people with the correct access to the data kept on chain would in turn be able to call up the video.

Enigma’s secret contract system is its way of managing inputs and outputs to storage that prevent unrelated parties from seeing any of the data involved.

Sitting between the blockchain and the offchain data is a distributed hash table (DHT), which is a database of locations where data is stored. The DHT is managed by a system of multiparty computations (MPC). The DHT is like an address book, and the MPCs do the work of using that DHT to coordinate between the blockchain and the offchain data.

MPCs are distributed over nodes on the Enigma network so that even the references to the DHTs are broken up, making it so that no one owner of a node would be able to sensibly construct enough information about a DHT to find any data they aren’t granted access to.

What all this means is that requests for data can come from any blockchain, pass through the Enigma network, and be located in storage, without anyone on the Enigma network being able to observe any part of it.

Where exactly is all this storage? Enigma plans to create a market where people can offer to sell storage space for the Enigma token, ENG. In this way, storage is also decentralized so that it can be provided by anyone wanting to participate. And with the DHT breaking data into fragments, it will not be possible for anyone providing storage to parse the data on their computers to know what they have.

All they will have are clusters of data aggregated from multiple Enigma users, to the degree that if they had part of a video file, not only would they not be able to see any part of it to know its content, they wouldn’t even be able to know that it was a video file and not a text or executable file, or anything else.

Enigma Roadmap

You can see Enigma’s roadmap in somewhat point form on their Trello board, though their Medium blog is a little more reader-friendly and more informative.

The Enigma Team

Enigma’s team originated largely from MIT. CEO and co-founder Guy Zyskind, has a Master of Science degree from MIT, as well as years of software development experience, and has taught courses on blockchain technology at MIT.

The other co-founder, and CPO, Can Kisagun, is also a graduate from MIT, holds an MBA, and has since been involved in a number of startups.

Competitors and Challenges

In the blockchain space, a possible direct competitor to Enigma is a project called Keep Network, which creates an off-chain storage marketplace for Ethereum chains. Their whitepaper makes a lot of the same claims Enigma does. However, Enigma has a head start on them, and also Keep Network does not seem to have a plan for storage for dapps, whereas Enigma does.

iExec is another blockchain that is similar to Enigma in that it creates an off-chain storage solution for Ethereum-based blockchains, but its focus is on data storage for dapps, not necessarily storage in general. Enigma, handling both dapps and basic storage, would seem to be a little more versatile.

How To Purchase and Store Enigma

ENG will be used for purchasing storage space and facilitating the distributed cloud storage market. So not only can you purchase it for speculative purposes, you can also potentially earn it by offering any spare storage you might have on offer.

Conclusion

Enigma is offering a practical solution to a very real issue that many blockchain systems face, and their system of keeping data obfuscated against prying eyes is straightforward. Some purists will bristle at the idea of second-layer solutions to data storage, but those who feel that blockchains should be left to do what blockchains do best, while other solutions tackle remaining technical challenges, would likely see a lot of sensibility in the Enigma approach.

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About Dave Gutteridge

Dave is a writer and performer who got involved in cryptocurrencies at the start of 2017 when he was hired to work at a Bitcoin related company. Since then, he's been writing about crypto for various online magazines, which has given him the opportunity to continually learn deepen his understanding of this exciting new world. When not writing, Dave performs standup comedy, draws comic book super heroes, and fights mortality through diet and exercise.

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